Responsible Investment activities

This is an issue that poses significant potential risks to not only our planet but the assets in which we invest too. So how companies manage these risks is important to us, as it could affect the funds we’ll need in the future to pay your benefits.

We were one of the first pension funds in the world to recognise the potential impact of climate change for long-term investors. And we’ve been actively working with our investor partners for over a decade to address it.

Here are some examples of how we’re addressing climate change:

• We supported the Paris Agreement to limit global temperature rises to 2⁰C or lower.
• We either helped establish or are an active supporter of a number of initiatives designed to bring industry leaders together to tackle climate change. For example, we co-founded the Institutional Investor Group on Climate Change (IIGCC). IIGCC provides a forum for European institutional investors to engage with policymakers on the long-term risks and opportunities of climate change.
• We’re an active supporter of Climate Action 100+ – a collaborative engagement of major global investors targeting the 100 largest emitters of carbon in the global economy.
• We’ve committed over £700m in financing UK renewables projects and low carbon energy infrastructure like wind power.
• Since 2009, we’ve been assessing the carbon footprint of our public equity portfolio. This allows us to factor climate change considerations into our investment decisions where it has a financial bearing. In 2015, we became a signatory to the Montréal Pledge, committing to annually measure and publicly disclose the carbon footprint of our equity portfolio.
• We’re one of a small number of pension funds globally to produce a Task Force for Climate-Related Financial Disclosures Report (TCFD). Within this report, amongst other things, we disclose how action on climate change is governed at USS, what we believe its impact might be, and what metrics and approaches we use to identifying and managing climate-related risks and opportunities.

For more information on how we approach climate change, the above examples and our case studies, take a look at our Responsible Investment Report.

It’s important that the businesses we invest in have a strong structure in place. It helps our long-term corporate performance and enhances the value of our investments.

We engage with companies and policymakers on corporate governance issues such as succession planning, board composition and oversight, and executive pay.

See our Responsible Investment Report for a case study on executive remuneration.

We make full use of our rights as a shareholder of the companies in which we invest directly to secure the best returns for our members.

We integrate environmental, social and governance (ESG) considerations both before and after we invest. This is important in our direct investments as we expect to own them for many years. So we have the ability to directly influence board composition, strategy and remuneration.

See our Responsible Investment Report for our approach to direct investing.